Manpower outsourcing service charge raised up to 7% by Centre

Chandigarh, January 15

Complaints of exploitation of outsourced employees and malpractices in their recruitment may soon be a thing of past with the Ministry of Finance ordering fixing of the minimum service charges for the procurement of manpower outsourcing service at 3.85% (3% profit plus transaction charges, which are 0.85% at present), as proposed by Government eMarketplace (GeM).

“The procuring entities can also fix the service charge above 3.85% with proper justification on file, wherever required. However, such charges should not exceed 7% (including transaction charges) in any case. Least cost system (LCS) may be considered for procurement, wherever appropriate, especially in high value cases,” stated the order.

The UT is going to follow these directions while recruiting outsourced staff. In some UT wings such as the Municipal Corporation, only .1% service charges in the procurement of manpower outsourcing service is being taken.

“This was leading to instances wherein contractors were asking for Rs 10,000 each per year from those hired by them. Because on .1% profit they had nothing much to earn and were solely dependent on getting fee from hired staff in form of processing fee,” said an official. However, the civic body had recently mandated that if a contractor got changed, the manpower would remain the same and no charges would be taken from the existing staff. The staff have been facing the problem of delayed salaries.

SPIC may do hiring

Hiring through outsourcing has further been proposed through the Society for Promotion of IT in Chandigarh (SPIC). It may take up the matter at its next meeting. It had been proposed to get SPIC listed on the GeM for recruitment of outsourced employees. Following which, different UT depts will prefer hiring outsourced staff from SPIC.

Service charges

• 0.85% Current
• 3.85% Lower cap
• 7% Upper cap